If high CPA or Revenue share is what attracts you to promote a forex broker, then chances are that you are most likely to waste your time for nothing. In this article, we focus on some important points to bear in mind while choosing a forex broker to promote. Now a days, as we see more and more forex brokers setting up shop, as an affiliate it is but obvious that you would be getting spammed with emails soliciting you to promote the forex brands.
So how does an affiliate or a Forex IB go about selecting the right forex broker to promote?
Its a Partnership
Forex affiliate marketing or Introducing broker is a business of partnership. Sadly though, most brokers tend to wash off their hands after the deal is concluded. There could be many reasons.. from the affiliate manager having to meet their monthly targets to just plain ignorance of the partnership.
Be wary of such forex brokers who think that offering a high commission is what it takes to get you to promote them. Truth is that even if you were offered a 100% revenue share deal or a $1000 CPA, if the broker doesn’t do a good job at converting traders, it is pointless.
As such, be very careful when dealing with account managers who start off their emails highlighting high commission deals. In most cases, you are simply wasting your time.
Research into the Broker
Doing a background research helps you to not only negotiate a better deal but also keeps you off from promoting fraudulent brokers. The best way is to visit the broker’s website and read up on their company, terms and conditions, trading conditions. See if the broker has a phone number listed or offers more than one way to contact them.
While being licensed doesn’t really help us affiliates/IB’s do make sure that the company is legally registered. Be very careful about forex brokers listed in dodgy tax havens such as BVI, Seychelles, Mauritius, Isle of Mann, etc. Despite these tax-havens having their own financial watchdog, chances are that should the broker decide to wind up operations and disappear overnight, there is a good possibility that the regulatory financial body won’t be of much help.
Read the fine print
The devil is in the details, so take time; a day or two to go through the terms and conditions before signing up. The key points to focus on are:
Who will be providing support/retention for the traders you refer.
This might seem trivial, but if you are an Introducing Broker, unless specified in the terms the forex broker pushes the onus of vetting the traders onto you.
What is the minimum amount for commissions to be paid
Most brokers have a limit of $100 to withdraw funds, irrespective whether you are promoting as an affiliate or as an Introducing broker. Check on issues such as rollover of amounts, negative commissions and so on.
Referral Activity Clauses
Pay attention to any clauses that dictate the relationship, especially in regards to inactivity. Some brokers have dodgy terms where they are in their right to terminate and keep your referred client’s commissions should the affiliate or IB fail to refer new depositing traders.
What happens when the broker decides to merge/close
Let me best illustrate this aspect with a real life example. Tradesmarter (marketpunter) decided to close down their binary options brand and re-brand to 24Bulls.com In doing so, Tradesmarter managed to go scot free without having to compensate affiliates for the traders (live traders) that they already acquired via Tradesmarter.
One cannot stress enough on this aspect. Always ask/check with the broker you promote on this aspect. While it might seem far-fetched imagine having referred quite a few live clients only to see your hard work literally being washed down the drain. Be sure to protect yourself against such ‘business decisions’, especially in competitive times such as these where mergers, re-branding are quite common.
Trust! The Bottom-line
Just as with any relationship, a forex affiliate or IB partnership evolves overtime. Build a good rapport with your point of contact and also make sure to have at least another back-up contact from within the company. The more longer you promote a broker, the better the partnership becomes, which also gives you the perks of surprise bonuses or a hike to your commissions. Make sure to start off your affiliate/IB partnership on the right/educated note so you don’t regret later.